This Aamal Company Q.P.S.C. (DSM:AHCS) Analyst Is Way More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Aamal Company Q.P.S.C. (DSM:AHCS), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, Aamal Company Q.P.S.C's one analyst currently expects revenues in 2021 to be ر.ق1.2b, approximately in line with the last 12 months. Statutory earnings per share are presumed to surge 77% to ر.ق0.03. Before this latest update, the analyst had been forecasting revenues of ر.ق1.5b and earnings per share (EPS) of ر.ق0.05 in 2021. Indeed, we can see that the analyst is a lot more bearish about Aamal Company Q.P.S.C's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Aamal Company Q.P.S.C

It'll come as no surprise then, to learn that the analyst has cut their price target 6.3% to ر.ق0.82. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Aamal Company Q.P.S.C analyst has a price target of ر.ق0.99 per share, while the most pessimistic values it at ر.ق0.77. This is a very narrow spread of estimates, implying either that Aamal Company Q.P.S.C is an easy company to value, or - more likely - the analyst is relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 21% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.0% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Aamal Company Q.P.S.C to suffer worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Aamal Company Q.P.S.C. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Aamal Company Q.P.S.C's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Aamal Company Q.P.S.C.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Aamal Company Q.P.S.C going out as far as 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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